WASHINGTON, June 23 (Reuters) - The U.S. commodities
regulator will have to carry out a review of metals warehousing
if a bill before the U.S. House of Representatives is passed,
the latest sign of intense U.S. political pressure over the
controversy at the London Metal Exchange.

Representative Bob Goodlatte, who chairs the House Judiciary
Committee, urged the CFTC to take a tougher stance on the LME
when the House Committee on Agriculture in April approved a bill
reauthorizing the agency's mandate.

The LME is struggling to resolve a years-long controversy
after complaints from brewers, which use aluminum for beer cans,
and other companies that excessive stockpiling by warehouses
owned by Wall Street banks was inflating prices.

The text of the bill has now been amended to include
Goodlatte's request for a study by the CFTC on how it oversees
metals markets, specifically to compare the rules for foreign
and domestic exchanges.

The fact that the legislation addresses the issue shows the
ongoing scrutiny of the warehousing business by politicians,
even if the bill stands little chance of making it through
Congress against opposition from President Barack Obama. The
House is scheduled to discuss the bill late on Monday, and to
vote on it a day later.

The LME is regulated in Britain by the UK's Financial
Conduct Authority, while the CFTC holds sway over its U.S.
business.

The LME has largely been exempt from the CFTC's rules since
2001 but is now seeking to register with the agency as a
so-called foreign board of trade.

The CFTC and Department of Justice have been looking into
allegations of manipulation of metal storage since last summer.

Complaints about inflated prices and long wait times to take
delivery of metal, particularly in Detroit where Goldman Sachs
Group Inc operates a warehouse company, have plagued the
LME, the world's No.1 base metals exchange for years.

The issue captured public and political attention last year,
with much of the charge led by Senator Sherrod Brown, an Ohio
Democrat critical of large banks.
(Reporting by Douwe Miedema in Washington; Additional reporting
by Josephine Mason in New York; Editing by Ken Wills)